G-III Apparel Group Ltd. (Nasdaq:GIII), parent to Starter and other team licensed and fashion brands, reported a drop in sales and profit for its fiscal third quarter, ended October 31.

Net sales fell nearly 3 percent to $883 million compared to $910 million in the year-ago period. The company’s net income for the third quarter was $70.6 million, or $1.50 per diluted share, compared to $87.2 million, or $1.87 per diluted share, in the prior year’s comparable period.

Company officials also announced the completion of its acquisition of the Donna Karan and DKNY brands from LVMH for $650 million.

Morris Goldfarb, G-III’s Chairman and CEO, said, “We have systematically, steadily and thoughtfully diversified into a wide range of categories, both organically and through strategic acquisitions. We have achieved tremendous diversification, built a portfolio of incredible brands and cemented a leadership position across the industry. We believe that our premium brands, including those that come with our acquisition today of the Donna Karan business, position us extremely well to drive sales and profit growth well into the future. We see a multi-billion dollar revenue growth opportunity for our company over time.”

Mr. Goldfarb concluded, “While conditions in our industry have been and remain challenging, we have what it takes across the organization in terms of drive, commitment and talent to carry through on our growth initiatives and deliver excellent value for our shareholders, our customers and our partners.”

Revised Outlook
With the results and changes, G-III is now forecasting net sales of approximately $2.43 billion and net income between $67 million and $72 million, or a range between $1.41 and $1.51 per diluted share. The full-year forecast includes the company’s net sales estimate of approximately $25 million and operating losses and additional interest expense of approximately $21 million, before taxes, equal to 28 cents per diluted share, associated with the acquisition of Donna Karan International Inc. The current-year forecast also includes professional fees of approximately $15 million, before taxes, equal to approximately 20 cents per diluted share, in connection with the acquisition. In addition, the forecast includes the impact of the issuance of approximately 2.6 million shares of new G-III common stock to the LVMH as part of the deal.

On an adjusted basis, excluding the acquisition’s impact on net sales, operating losses, interest expense, fourth-quarter professional fees and the number of shares outstanding, G-III’s updated forecast is for net sales of $2.41 billion and net income between $87 million and $93 million, or a range between $1.86 and $1.96 per diluted share, compared to previous guidance of net sales of approximately $2.48 billion and net income between $102 million and $106 million, or a range between $2.16 and $2.26 per diluted share.

The previous forecast and the adjusted forecast were both reduced for professional fees associated with the acquisition of Donna Karan incurred in the second quarter of $3 million, before taxes, equal to approximately 4 cents per diluted share. For the fiscal year ended January 31, 2016, net sales were $2.34 billion and net income was $114.3 million, or $2.46 per diluted share.